A guaranteed stop loss order is a risk management tool commonly used in trading and investing. It is a specific type of stop loss order that provides traders with an added layer of protection against adverse market movements.

In essence, a stop loss order is an instruction given to a broker or trading platform to automatically sell a security (such as a stock or a currency pair) when its price reaches a specified level. This is done to limit potential losses by preventing the security from declining further in value. However, a standard stop loss order doesn't guarantee execution at the exact specified price, especially during periods of high market volatility. This can result in what's known as "slippage," where the executed price is worse than the intended stop price.

A guaranteed stop loss order, on the other hand, ensures that the specified price level will be met, regardless of market conditions. If the market suddenly gaps or experiences extreme volatility, the guaranteed stop loss order will still be executed at the predetermined price, shielding the trader from excessive losses. This added security comes at a cost, as brokers typically charge a slightly higher fee for providing this level of protection.

Traders who engage in high-stakes or highly volatile markets often opt for guaranteed stop loss orders to safeguard their investments and trading positions. It provides them with peace of mind knowing that their potential losses are capped at a known amount, irrespective of unexpected market events. However, it's essential for traders to carefully consider the cost-benefit ratio of using guaranteed stop loss orders, as the added expenses can impact overall profitability.